The Profitability of Small, Single-Market Banks In an Era of Multimarket Banking
Timothy H. Hannan and Robin A. Prager 2006-41

Abstract:&nbspThis paper examines the relationship between multimarket bank presence and the profitability
(and therefore viability) of small, single-market banks. We find that increased presence of
multimarket banks is associated with a significant reduction in the profitability of small,
single-market banks operating in rural banking markets, but not of those operating in urban markets.
We explore this relationship by breaking single-market bank profits down into several components in
order to shed light on the mechanisms through which multimarket bank presence might influence the
profitability of single-market banks.